New! Student Finance Calculator 2012

nheather

Which inflation?

CPI
RPI
Rate of increase of Average Weekly Earning

And it would be nice to see this on the SFE or Department of Business rather than a third party website.

I doubt it will hold much weight if it proves to be untrue and I say "but Dan on MSE said it would be this ...."

Cheers,

Nigel

nheather

With the MSE calculator one scenario is the following:- borrow £9k tuition fees and the minimum maintenance grant of £3.5k pa (which is all a lot of students can get). Starting salary £25k, RPI 3%, salary growth RPI + between 4% and 5%, average UK earnings growth RPI+ 1% - then the loan will be paid off before 30 years (about 27).

One of us is using the calculator incorrectly. If I put those figures in (salary growth = RPI+4%) then I get

original loan = £37.5k
wipes at 30 years
total repaid = £107,430
final salary £190,310

so your example has an unrealistic salary growth, a high final salary, and a repayment of 2869 times the loan amount.

Or total interest of 286,400%

Obviously one of us is doing something wrong. Happy to find that it is me - in fact I will be really pleased if your version is the right one.

Cheers,

Nigel

setmefree2

nheather wrote: »

Which inflation?

CPI
RPI
Rate of increase of Average Weekly Earning

And it would be nice to see this on the SFE or Department of Business rather than a third party website.

I doubt it will hold much weight if it proves to be untrue and I say "but Dan on MSE said it would be this ....

Whilst I agree all that is true - I doubt anyone is going to base a decision on paying their kid's costs upfront on whether the thresholds rise by RPI versus CPI (or whatever) since the difference between them is presently 0.1% (March CPI 3.5% RPI 3.6%)(or whatever).

('Tis all a disgrace however I agree on that.)

setmefree2

nheather wrote: »

One of us is using the calculator incorrectly. If I put those figures in (salary growth = RPI+4%) then I get

I think you must have misunderstood my post. The example I gave was for salary growth of between RPI+4% and RPI+5%, since at RPI +4% the loan is w/off at 30 years but at RPI+5% the loan is paid back at 27 years - so somewhere in between +4% and +5% the loan started to be paid back.

nheather wrote: »

so your example has an unrealistic salary growth, a high final salary,

As I commented previously, I've been posting on this thread long enough to know that posters have very different ideas of realistic life time salary projections, and posters rarely shift ther position, so one can spend hours chasing your tail over that one......

nheather wrote: »

and a repayment of 2869 times the loan amount.

You've forgotten inflation?



Anyways,
Try the BBC Student loan calculator here.
http://www.bbc.co.uk/news/education-14785676#student_finance_form

Male borrows £12,500 pa over 3 years (total £37.5k)

Male Legal pays back £52,956 over 17 years
Male ICT pays back £55,513 over 26 years.
Male National Average £32,923 over 26 years (Balance w/off)
Male Teacher pays back £57,180 over 30 years

The BBC Calculator uses a real interest rate - so effectively they are stripping out the effects of inflation/RPI.

nheather

The BBC Calculator uses a real interest rate - so effectively they are stripping out the effects of inflation/RPI.

The BBC calculator is a real joke and cop out. By removing RPI it makes their job really easy. But it is unrealistic.

Example:

RPI = 3%. Interest rate = RPI + 3% = 6% Loan = £10,000

So after a year the loan has grown to £10,600.

So how much do you owe?

I think it is £10,600

But according to the BBC (and you it seems) it is only £10,300.

Try telling that to the lender - actually I'm only going to pay you back £10,300 because I've stripped at the RPI bit to reflect the real value of money.

I understand what they are trying to do - the MSE calculator does it better by giving the actual amount to replay plus the effective 'real value' based on inflation.

As I commented previously, I've been posting on this thread long enough to know that posters have very different ideas of realistic life time salary projections, and posters rarely shift ther position, so one can spend hours chasing your tail over that one......

And I responded. I understand that people have different views, but what I was saying is that the vast majority would agree that a start salary of £50k is well above average.

In this particular post I was saying that a year on year salary rise of RPI+5% is unrealistic. The vast majority of people don't get anything like that.

At the moment that is 8.6% - very few people are getting pay rises like that - more like 2 or 3%.

Just seen the Annual Wage Increase for 2011 published on BBC News - 1.1%.

Whilst I agree all that is true - I doubt anyone is going to base a decision on paying their kid's costs upfront on whether the thresholds rise by RPI versus CPI (or whatever) since the difference between them is presently 0.1% (March CPI 3.5% RPI 3.6%)(or whatever).

Agree. But the point is, if it is a characteristic T&C of the loan then they should be able to spell out exactly what it is. I can't find any confirmation that it will be increased at all on any authorised website or documentation, let alone what will be used to calculate. And finally, whilst the difference between CPI and RPI might be small (typically 1%), the rate of increase of Annual Weekly Earnings can be less than either of them.

Cheers,

Nigel

Tmon

this is great brilliant but a few thoughts to improve:
1. Adjust the years you will be studying (Grad students study 1-2 instead of 4)
2. Would be good to allow for higher amounts of borrowing (thinking grad students again)

setmefree2

nheather wrote: »

The BBC calculator is a real joke and cop out.

Only trying to help. Since you don't seem to like any of the calculators why don't you make your own spreadsheet?

nheather wrote: »

Agree. But the point is, if it is a characteristic T&C of the loan then they should be able to spell out exactly what it is. I can't find any confirmation that it will be increased at all on any authorised website or documentation, let alone what will be used to calculate. .

I totally agree. Why wouldn't I? Why wouldn't anyone?

nheather

Only trying to help. Since you don't seem to like any of the calculators why don't you make your own spreadsheet?

Sorry wasn't meant to be an attack on you. I just find the BBC calculator quite irresponsible. By removing RPI from the calculations it seriously understates the amount that the student will have to pay back.

I understand what they are trying to do, but many won't and will come away with the wrong impression.

Although the BBC do state that RPI is ignorred I don't think they do enough to spell out clearly what this means.


As for my own spreadsheet - that's how I originally discovered the true horror of the new loan system. I created a spreadsheet and was so shocked by the numbers and that it appeared near impossible to repay I felt certain that I had made a mistake. So I researched further and found that unfortunately, my spreadsheet was correct.

I actually think that the MSE calculator is the best I have found, the only weakness is the hard-coding of the threshold increase at RPI+1% which I think may be too optimistic.

Cheers,

Nigel

setmefree2

nheather wrote: »

Sorry wasn't meant to be an attack on you.

That's ok. Very stressful stuff....If you pay upfront you might wish you hadn't - on the other hand if you don't you might wish you had. Doesn't help that the government aren't forthcoming with the necessary information, the sums involved are large and that many young people are very fickle:D


We've been all around the houses thinking about this...we are drowning in spreadsheets..now, if only we had a crysal ball

MrsAverage

We advised our DS to pause his application when we realised that t&cs were not yet finalised. I have today just been back to his application with him from where you can access t&cs and it's no surprise to find it still reads
"If you: • are starting your course on or after 1 September 2012 and;- live in England or Wales; or- are an EU student funded by England or Wales. You will, subject to Parliamentary approval of new legislation which is due to come into force by 6 April 2012, be on Repayment Plan 2 – look out for the pink boxes as this information applies to you. in an amended format If Parliament does not approve the new legislation then you will be on Repayment Plan 1."
So, even though it was supposed to be passed on 6th April does anyone know if it actually was?

By the way, the page then goes onto say for futher info link to the student loans repayment company - but that only has t&cs for the old style loans.

I think the only way to get to these so called t&cs are via the loan application process, but you might find this link works
http://www.studentfinance.direct.gov.uk/pls/portal/docs/PAGE/DPIPG001/DPIPS001/SFE_TERMSANDCONDITIONS_1213.PDF